Washington (CNN) — Obama administration officials indicated late Friday afternoon that there was a growing possibility of reaching an 11th-hour budget deal with Republicans that would avoid a partial shutdown of the federal government.
We are “more optimistic now than we were four hours ago” about the possibility of getting an agreement, a source at the White House told CNN shortly before 5 p.m. ET.
There is a “good chance” that President Barack Obama will speak publicly about the crisis tonight, the source added.
The sudden burst of optimism came as top Democratic and Republican negotiators raced against the clock to cobble together a deal. If they fail to do so by midnight, when the current spending authorization measure expires, parts of the government will close down.
That means 800,000 government workers would be furloughed and a range of government services would halt, though essential services such as law enforcement would continue to function.
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Obama discussed the issue over the phone earlier in the day with House Speaker John Boehner, R-Ohio, and Senate Majority Leader Harry Reid, D-Nevada, according to White House press secretary Jay Carney. Anticipating a shutdown, he also canceled a planned weekend trip to Williamsburg, Virginia, with his family.
As the talks moved ahead, however, leading politicians from both sides of the aisle continued to trade accusations about the cause of the standoff.
Democrats said Republicans were hung up on abortion and other issues related to women’s health. Republicans insisted that the size of spending reductions was still the main cause of the dispute.
“This all deals with women’s health. Everything (else) has been resolved. Everything,” Reid said Friday morning. “It’s an ideological battle. It has nothing to do with fiscal integrity in this country.”
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“If that sounds ridiculous, it’s because it is ridiculous,” he later added
Republicans have been pushing to strip federal funding from Planned Parenthood during the budget talks. They are also trying to get federal dollars now set aside for family planning and women’s health turned into block grants for states, according to a Democratic source.
Such a move — opposed by Democrats — would give governors and state legislatures more ability to cut funding for services opposed by conservatives.
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“It’s an opportunity for the right wing in the House (of Representatives) to really sock it to women,” said Sen. Dianne Feinstein, D-California.
For his part, Boehner repeatedly disputed Reid’s assertion that abortion is the key sticking point.
“There’s only one reason that we do not have an agreement as yet, and that issue is spending,” the speaker said. “We’re close to a resolution on policy issues, but I think the American people deserve to know: When will the White House and when will Senate Democrats get serious about cutting spending?”
“Most of the policy issues have been dealt with,” he later added. But “when (Republicans) say we’re serious about cutting spending, we’re damn serious about it.”
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Boehner was surrounded by Republican women when he met with reporters — an apparent reaction to Democratic claims.
“We’re facing an economic disaster,” said Rep. Judy Biggert, R-Illinois. “We have to cut the spending. (It’s) not about some other issue that those … on the other side keep talking about.”
Reid insisted that negotiators have already agreed on a $38 billion cut from current spending levels for the rest of the fiscal year, which ends September 30.
“The speaker is the one who came up with the number,” Reid insisted. “We didn’t invent it.”
GOP sources familiar with the talks confirmed Reid’s assertion that the two sides had settled on a total of $38 billion, but sources in both parties cautioned that the total could still be raised or lowered a bit.
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Reid told reporters that, if necessary, he would try to push a one-week funding extension through the Senate in order to give negotiators more time. The measure would cover Pentagon spending for the rest of the fiscal year, he said. Sen. Chuck Schumer, D-New York, noted that it would also cut $2 billion in spending.
Such a move, however, would require the agreement of every senator — something Reid is unlikely to get.
The GOP-controlled House of Representatives passed its own version of a one-week extension Thursday. That measure, which passed 247-181 in a largely party-line vote, would also fund the Pentagon for the remainder of the current fiscal year. But it also would slash federal spending by another $12 billion and included so-called “policy riders” that stipulate political and ideological restrictions related to abortion and other issues.
Reid declared the short-term extension a “nonstarter,” and the White House promised a veto if it reached Obama’s desk.
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As a result, pressure has continued to ratchet up on negotiators. Repeated meetings between Obama and congressional leaders over the past two days have failed to break the impasse.
A Thursday night meeting involving Obama, Reid and Boehner was described by one top White House aide as “serious, focused and candid.”
Publicly, the president said the mechanism of shutting down government operations had started in case a deal proves elusive, which he said would hurt federal workers, people who rely on government services and the nation’s economic recovery.
“For us to go backwards because Washington couldn’t get its act together is unacceptable,” Obama said.
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Top aides on both sides of the aisle have seemed increasingly resigned to the prospect of a shutdown. Congressional staffers began receiving their furlough notices Thursday afternoon. Employees deemed “essential” during a shutdown would still be able to work; those considered “nonessential” would not.
Congressmen would continue to be paid in the event of a shutdown.
Earlier this year, the House passed a bill that included $61 billion in cuts from current spending levels, but the measure was rejected by the Democratic-controlled Senate. Two previous extensions of the government spending resolution have included $10 billion in cuts.
Republicans, under pressure from the conservative Tea Party movement to reduce the size of government, blame Democrats for failing to pass a fiscal year 2011 budget last year when they controlled both congressional chambers. They also say Obama and his party are ignoring the peril of rising federal deficits and the national debt.
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Democrats say the $61 billion in spending cuts in the House bill would harm the nation’s economic recovery and slash education and innovation programs essential for continued growth.
The budget brinkmanship showed the political stakes of the situation, with both parties trying to depict the other as unwilling to do what’s right for the country.
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Obama and Reid insist that Democrats have agreed to more than 50% of the spending cuts sought by Republicans, which they said should be sufficient for a compromise on a measure that has little overall effect on the deficit and debt issues.
One of biggest obstacles to a deal involves whether reductions in mandatory spending programs, known in appropriations parlance as “changes in mandatory spending” or CHIMPS, should be part of spending cuts.
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Examples of mandatory spending programs include Pell Grants, the Children’s Health Insurance Program and some types of highway funding. Such programs are funded for multiple years at a time, with the spending set for the time period covered, exempt from congressional authorization each year.
Democratic sources have said they want about half the overall cuts in this spending bill to come from mandatory spending programs, and they have proposed the necessary reductions in programs at the U.S. Department of Agriculture, the Justice Department and the Treasury Department, and in Pell Grants.
Republicans say that reducing the spending in a mandatory program for one year doesn’t prevent the amount from returning to its original level the following year.
CNN’s Dana Bash, Deirdre Walsh, Ted Barrett, Kate Bolduan, Brianna Keilar, Terry Frieden, Ed Henry and Dan Lothian contributed to this report.
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